Listing Category: Derivatives

AWS Training in Hyderabad

This course provides information on Amazon Web Services (AWS), their features and characteristics as well as how and why to use them. The <a href="">AWS training in Ameerpet</a> introduces you to AWS and cloud...

Valuing Bonds with Embedded Options

In this article, we will concentrate on callable bonds and putable bonds, although we’ll mention prepayable and convertible bonds as well.

The common method of valuing a callable or putable bond is to use a binomial interest rate tree. For the examples that follow, we’ll use the binomial tree we created here; it has 10% interest rate volatility: